Bank of England softens stablecoin stance with new proposals

LONDON (Reuters) -The Bank of England on Monday proposed that issuers of widely used stablecoins be allowed to invest up to 60% of the assets backing the digital tokens in short-term government debt, part of a raft of new rules that suggest a softening in its approach to the sector. Stablecoins are digital tokens designed to keep a constant value and often backed by traditional assets such as government debt. The sector is booming, aided by the U.S. agreeing federal rules earlier this year. The crypto industry sharply criticised a BoE proposal from 2023 to force issuers to hold all of their assets with the bank, which would not earn interest. Instead, the BoE said 40% of the assets would need to be held with it. “Today’s proposals mark a pivotal step towards implementing the UK’s stablecoi